One million workers not paying income tax or USC is “unsustainable”, the Irish Tax Institute has claimed.
The Institute described the tax system’s low base as "an inherent weakness" and urged the Government to widen it by including more lower income workers.
On Newstalk Breakfast, Irish Tax Institute spokesperson Anne Gunnell said the exchequer is far too reliant on multinationals.
“We currently have an over reliance on a small group of taxpayers – these high earners, [who] invariably actually work in multinational companies,” she said.
“For example, in 2022, 40% of all income tax and USC receipts came from the multinational sector.
“So, not only do we have a concentration and a risk in our corporation tax receipt base, this is also replicated in the income tax base – and that’s just not sustainable in the long term.”
Recommendations
The Irish Tax Institute has recommended that the 3% USC surcharge on self-employed earnings over €100,000 be eliminated.
Ms Gunnell said the suggestion was made on the grounds of equity.
“This is something that was endorsed by the Commission on Taxation and Welfare just a couple of years ago too,” she said.
“If you’re a PAYE worker, you don’t pay that 3% - that is only applied for non-PAYE income over €100,000.
“So we’re just saying equal treatment for all based on what you earn.”
Finance Minister
Finance Minister Jack Chambers said the Government has no plans to increase taxes on the low-paid.
“There’s a lot of low-income earners who we’ve taken out of the tax net, and we’ll be able to support them [through] the cost of living,” he said.
“There won't be any proposals from Fianna Fáil advanced to increase income tax.
"In fact, we need to make sure we continue to have a competitive position around income tax to make work attractive and to support those who work in our economy.”
Listen back here:
